NY Homeowners Ask High Court for Final Word on State Escrow Law

New York homeowners asked the US Supreme Court to reconsider whether a state law mandating interest payments on mortgage escrow accounts is applicable to national banks.

The homeowners are seeking review of a May ruling in the US Court of Appeals for the Second Circuit holding that New York’s mortgage escrow interest requirement is preempted by the National Bank Act, allowing lenders with national charters such as Bank of America Corp.'s retail banking subsidiary to evade the requirement.

“The Second Circuit’s decision leaves banks uncertain of the interest rates they must pay, undermining the stability on which our financial system ...